TTEC (TTEC) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 11% year-over-year to $534.1 million, with Engage segment weakness and Digital showing resilience; cost optimization and diversification strategies are underway amid macroeconomic headwinds.

• The company serves approximately 740 clients across 22 countries, with 54,000 employees, and is expanding its offshore footprint in South Africa and Egypt.

• Over 100 AI-enabled projects are underway, supporting innovation and digital integration across client solutions and internal operations.

• Healthcare, the largest vertical, faces significant budget pressures and lower seasonal volumes, impacting forecasts.

• Cost optimization and transformation initiatives are in progress to improve Engage profitability and support long-term growth.

Financial highlights

• Q2 2024 revenue was $534.1 million, down 11% year-over-year, with a $1.8 million FX impact.

• Adjusted EBITDA was $46.2 million (8.7% margin), down from $67.2 million (11.2%) year-over-year.

• GAAP operating loss was $224.4 million, driven by $233.5 million in non-cash goodwill impairments; non-GAAP operating income was $29.5 million.

• Net loss attributable to stockholders was $296.8 million; non-GAAP net income was $6.6 million.

• Free cash flow for the first six months was $6.0 million, down from $112.0 million in the prior year.

Outlook and guidance

• Full-year 2024 revenue guidance is $2,210 million–$2,260 million, with Engage revenue expected to decline 8%–12%.

• Digital segment guidance is largely unchanged, with EBITDA margin expectations raised to 15% at the midpoint.

• Non-GAAP adjusted EBITDA guidance is $201 million–$217 million (midpoint $209 million, 9.3% margin).

• New client wins are expected to contribute more materially to revenue in 2025 as programs scale.

• Q3 expected to show moderate sequential improvement, with stronger results anticipated in Q4.